A trove of leaked documents shows that HSBC’s Swiss private bank turned a blind eye to illegal activities of arms dealers and blood diamond traders while helping rich people evade taxes, according to a report based on the documents that was published Monday.
The data relate to accounts worth $100 billion held by more than 100,000 people and legal entities around the world.
A former HSBC employee-turned-whistleblower, Herve Falciani, gave the data to French tax authorities in 2008. France shared it with other governments and launched investigations.
The French newspaper Le Monde obtained a version of the data and shared the material with the International Consortium of Investigative Journalists, which analyzed the material together with The Guardian and the BBC in Britain.
WHAT THE FILES SHOW
The leaked documents mainly cover the years 2005 to 2007.
HSBC, which is based in London but has operations globally, served those close to the regimes of former Egyptian President Hosni Mubarak, former Tunisian leader Ben Ali and Syria’s Bashar Assad.
The consortium said clients include former and current politicians from Britain, Russia, Ukraine, Kenya, India, Mexico, Lebanon, the Democratic Republic of the Congo, Zimbabwe, and Algeria.
Switzerland had the greatest number of clients of the data examined, followed by France, the United Kingdom, Brazil and Italy. In terms of ranking by value, Switzerland was first with $31.2 billion, followed by the United Kingdom with $21.7 billion; Venezuela with $14.8 billion; the U.S. with $13.4 billion; and France with $12.5 billion.
WHY IT MATTERS
Though some of the details of such operations were disclosed previously, when HSBC was fined in 2012 by the U.S. for allowing criminals to use its branches for money laundering, Monday’s information suggests HSBC took an active role in assisting the wealthy in hiding their money from authorities.
“The bank repeatedly reassured clients that it would not disclose details of accounts to national authorities, even if evidence suggested that the accounts were undeclared to tax authorities in the client’s home country,” the consortium said. “Bank employees also discussed with clients a range of measures that would ultimately allow clients to avoid paying taxes in their home countries.”
Crawford Spence, a professor of accounting at the University of Warwick, said this case was different than other recent tax scandals.
“HSBC has been complicit in clear tax evasion